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Compute It uses activity-based costing. Two of Compute It's production activities are kitting (assembling the raw materials needed for each computer in one kit) and
Compute It uses activity-based costing. Two of Compute It's production activities are kitting (assembling the raw materials needed for each computer in one kit) and boxing the completed products for shipment to customers. Assume that Compute It spends $960,000 per month on kitting and $32,000 per month on boxing. Compute It allocates the following: Kitting costs based on the number of parts used in the computer Boxing costs based on the cubic feet of space the computer requires Suppose Compute it estimates it will use 400,000 parts per month and ship products with a total volume of 6,400 cubic feet per month. Assume that each desktop computer requires 125 parts and has a volume of 2 cubic feet. The predetermined overhead allocation rate for kitting is $2.40 per part and the predetermined overhead allocation rate for boxing is $5.00 per cubic foot. What are the kitting and boxing costs assigned to one desktop computer? (Round all calculations to the nearest cent.) A. Kitting Boxing $ 300.00 $ 10.00 B. O Kitting Boxing 30.00 $ 137.50 O C. Kitting Boxing 10.00 $ 300.00 OD. Boxing Kitting 9.60 $ 148.50
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